Abstract

Only 18 months after the UK government was bailed out by the International Monetary Fund, it managed to secure ‘triple-A’ status when Moody’s and Standard & Poor’s provided the country’s first sovereign credit rating in 1978. In this paper, David Gill details the successful efforts of senior officials at the Bank of England and the Treasury to influence the ratings process.

The rating agencies’ decision to award ‘triple-A’ status reflected more than simply an objective analysis of the UK’s improving economic fortunes. The Bank and the Treasury employed external advisers familiar with the process and controlled the flow of information available to their assessors, obscuring political weaknesses and stressing economic successes. The small and inexperienced credit ratings staff, operating years before efforts by the agencies to ‘professionalise’ their sovereign debt teams, only complemented the efforts of the civil service.